Ask Natasha - The difference between saving and investing

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Last month Guardian Wealth Management’s Senior Wealth Manager Natasha Maggessi, a specialist and experienced tax barrister in UAE personal finance, spoke to Cosmopolitan Middle East answering questions about saving, spending and borrowing money.

As featured in Cosmopolitian Middle East.

In this blog based on the original article, Natasha looks at the difference between saving and investing, which should by a priority.

How much of my salary should I aim to save?

I recommend at least 25% of your salary as usually, it is not just one thing you are saving for. For instance, you may need to pay into a pension scheme, whilst simultaneously saving towards the cost of your children’s education and a house deposit. It’s hard to say that one is more important than the other and looking at a list can be daunting, but once a set plan is in place it makes it much easier. UK expats generally have a higher paying job and tax free income, so it’s important not to waste the opportunity and save as much as you can!

What’s worse – having no investments, or having no rainy-day fund?

You should always have both and it is never too late to start. Your rainy-day fund should be at least two times your monthly salary and it is crucial to have it as an expat. If you lose your job or fall ill, this is your money to survive this time as unlike home countries, there is no state benefit to help you out. It is important to remember that this money should be easily accessible, so maybe keep it part in cash in your house and part in your savings account.

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A properly managed rainy-day fund along with life/critical insurance is an essential contingency plan that every expat should have.

Don't worry too much about getting interest on it. Additionally, if your rainy-day fund isn’t what it should be or even if it is, it’s very important to have life/critical illness insurance to cover you and your family through tough times.

Having accumulated a rainy-day fund now is the time to start investing, because if your money doesn't work for you, you will have to work longer for your money. Here, you must get an interest aligned with you risk profile and life goals and there are many different options available, from equities to bonds etc. Talk to an expert about this to avoid any bad investments.

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More about Natasha

Natasha is an experienced tax barrister and senior wealth manager who holds a masters graduate in International Economic Law (LLM) and is licensed by the Brazilian Bar Association and Chartered Institute of Securities & Investments.

With over 10 years experience across Brazil, Hong Kong and the Middle East, Natasha specialises in supporting expats with their personal financial planning, including family protection, life insurance, children's education planning and retirement planning

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